Lucas Barasa
7 October 2008
Nairobi — The Government will create two State-owned companies in the Energy ministry to meet market demands in the sector.
President Kibaki said the National Transmission Company (NTC) and Geothermal Development Company will be funded by the state to make the country self-sufficient in power production.
NTC will take some of the roles of the Kenya Power Lighting Company and President Kibaki said Sh750 million had already been set aside for the firm in this year's national budget.
"There is an urgent need to improve the quality of power by reducing high system losses and low voltages. Indeed, the current poor quality of power is largely due to lack of critical investments by the Kenya Power and Lighting Company over the years," the President said adding that the new company is to help address the challenge.
The President ordered for speedy registration of the power transmission company "so that it can begin its operations."
Energy Minister Kiraitu Murungi said the new company will help construct transmission lines which he said should be funded by the government and not through tariff increases.
Addressing the National Energy Conference at Kenyatta International Conference Centre in Nairobi, the President said the geothermal company will be formed within next two months.
The company is to help exploit geothermal potential in the country and promote investments as many private sector players have been reluctant to venture in it due to high front end and exploration costs.
Only 130 mega watts of geothermal potential is currently being exploited although potential stands between 4,000 to 7,000 mega watts.
Geothermal energy is cheaper and costs less than Sh4.20 per kilowatt hour.
The President said the government has allocated Sh4.5 billion for development of a 140 megawatt geothermal plant in Olkaria.
He repeated his order to the Ministry of Finance to review all taxes levies being charged to electricity consumers "so as to reduce the current burden of high power tariffs."
"In addition, the Minister for Energy should ensure that none of the power generation projects scheduled for completion between now and December 2009 are delayed."
Mr Murungi said the President's directive on taxes and levies will be implemented immediately acting Finance Minister John Michuki returns from an official visit to the UK.
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